The moratorium on legal proceedings, commenced or continued,
against a company in liquidation, is a tenet of an equitable and
orderly winding up process, intended to distribute a company's
assets equally and rateably between its stakeholders.
The moratorium is enshrined in section 97(1) of the
Cayman Islands' Companies Act (2023 Revision)
(the Companies Act) which states as follows:
'When a winding up order is made or a provisional
liquidator is appointed, no suit, action or other proceedings,
other than criminal proceedings, shall be proceeded with or
commenced against the company except with leave of the Court and
subject to such terms as the Court may impose.'
At this point, an unsecured creditor who has already brought
proceedings against a company, or is contemplating doing so, will
typically have two options:
